What is the ruling on purchasing a car from an Islamic bank if the contract includes a clause stipulating the forfeiture of the right to pay in installments and the immediate maturity of all installments, along with a demand for compensation for actual damages, in the event of delay in paying any installment?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
It is permissible for the bank or the seller to stipulate that the remaining deferred installments become due upon the debtor's procrastination, unless the debtor is in genuine hardship. However, the bank's stipulation of its right to demand compensation from the buyer for actual damages (late payment penalty) is impermissible, as it constitutes clear usury (riba). Nevertheless, it is permissible to charge the procrastinating debtor for litigation and lawyer fees if the creditor takes legal action against him.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/117526
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 117526
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy